France fast-tracks rural banks’ digital evolution
THE Rural Bankers Association of the Philippines (RBAP) and the French Development Agency (AFD) have signed a Grant Facility Agreement of €800,000, or around P47.9 million, to support the digital transformation of inclusive financial institutions, starting with rural banks.
As a perspective, banks in the Philippine countryside have played significant roles in promoting inclusivity in markets underserved by their traditional commercial counterparts in the past 80 years. To remain competitive, they must modernize and adapt from manual into digitized processes for increased efficiency, reduced costs, and improved services for their markets.
With this in mind, the grant will finance technical assistance covering training, capacity building, as well as communication and awareness-raising activities supportive of the digital transition of core-banking systems to the cloud, with a view to further develop financial inclusion of underserved and unbanked populations in the country.
Such is provided within the framework of the global publicpolicy reform of the financial-inclusion sector in the Philippines, and the implementation of the Inclusive Finance Development Program (IFDP). The AFD, alongside the Asian Development Bank (ADB), has been supporting this program since 2019 through a €100-million sovereign loan to the government of the Philippines.
The IFDP contributes to the overall objective of inclusive growth and sustainable development of the Philippines by supporting the development of financial inclusion of its citizenry—particularly, the poor and the rural population—through the consolidation of the institutional and regulatory environment and the improvement of financial infrastructures, as well as the capacity building of financial services providers, supervisors, and regulators.
“RBAP is thankful for the support and trust that AFD has given to our association,” expressed Elizabeth Carlos-timbol, RBAP president. “Through this partnership, this goal is finally realized. We look forward to working with AFD to create capacity-building programs tailor-fit to the needs of the rural banks for us to be able to compete at par...with other financial institutions in the country.”
During the occasion, AFD Country Director in the Philippines Laurent Klein said, “The AFD is very pleased with the partnership concluded today with the RBAP. With a wide range and diversity in size and activity levels, rural banks remain in a unique position to extend the reach of financial services in rural areas.”
Klein added, “In line with our organization’s strategic objectives to support financial systems and fight social and economic inequalities, this technical assistance will…promote access to quality digital financial services for all—including the most vulnerable part[s] of the population. This agreement also marks a major step forward in our collaboration with the ADB to support inclusive finance in the Philippines.”
Ambassador Michèle Boccoz emphasized, “France is proud to support, through the AFD, strategic reforms of the [Philippine government] in digital transformation and inclusion in the financial sector for the benefit of [Filipinos]. This is a further milestone in the bilateral relationship between our two countries.”
Boccoz furthered: “The...pandemic is disrupting our societies, and leads us to consider radical shifts in our usual modes of economic and social interactions. We believe…this program, through the AFD and Rbap…will help pave the way to resilience and recovery—especially of disadvantaged Filipinos in...rural areas.”